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To: re3 who wrote (772)4/5/2008 10:56:49 AM
From: Real Man  Respond to of 990
 
This is how they play the game when you buy OOM puts. If
volatility expands, they are still covered by time premium
and buy/sell spreads to a degree. The smirk shifts as
volatility goes up, and everything is fine, unless you have
a "tail" event. They lose some money sometimes, of course,
but the Fed is there to make sure they don't.